The Temporary Emergency Bridging Measure for Sustained Employment (Noodmaatregel Overbrugging Werkgelegenheid , the “NOW”) has been in force since March 2020. The Dutch government announced new changes to the NOW and an extension of the measure with four months. Applications for the new NOW measure, starting from July 6, 2020, are subject to additional requirements that have been announced by the Dutch government on May 20, 2020 (“NOW 2.0“). In this alert we will inform you of the NOW 2.0 and the requirements for and application details thereof.
In view of the expiry of the first subsidy period per May 31, 2020, the Dutch government has decided to extend the NOW for an additional period of four months. The purpose of the NOW remains unchanged; to enable companies with a turnover loss of at least 20% to retain as many employees as possible. For more information on the (original) NOW, please see our blog from April 8, 2020. For calculating the eligible subsidy under the NOW 2.0, the turnover loss is determined over a four-month period starting on June 1, July 1 or August 1. For applicants that apply for the NOW subsidy for the second time, the turnover period must be continuously to the first period. Applications for the NOW 2.0 are open to both companies that have already submitted an application for a NOW subsidy during the previous subsidy period and companies making a first subsidy application.
For both NOW and NOW 2.0, all governmental subsidies received by companies in the context of the COVID-19 crisis are considered as turnover.
The following conditions have been adjusted for NOW 2.0 compared to the (original) NOW:
- NOW 2.0 is a subsidy for a period of four months instead of three;
- the reference month for the wage bill is set at March 2020 instead of January 2020;
- dismissal of employees on economic grounds is allowed. The company will be required to pay back 100% of the compensation it has received per employee instead of 150%. Hence, there is no penalty for dismissal of employees on economic grounds;
- in case of a notification as meant in the Collective Redundancy (Notification) Act (Wet melding collectief ontslag) or in case of large layoffs of 20 employees or more on economic grounds, the subsidy amount will be cut by 5%. This 5% cut is in addition to the reduction of the subsidy with the wage bill of the dismissed employees. However, if there is an agreement between the company and the labor union, no reduction will be applied to the subsidy amount;
- companies are obligated to encourage their employees to request development advice or to receive training to preserve their employment;
- in case a subsidy is granted at or above the amount for which an auditor’s report is required (i.e. EUR 100,000 advance payment or EUR 125,000 final subsidy), no dividend or bonus may be distributed and no own shares may be acquired over 2020 up to and including the shareholders’ meeting in 2021. For operational companies that apply for NOW 2.0 whilst the group as a whole does not meet the 20% turnover loss as meant in article 7 of the NOW 2.0, this threshold does not apply. They must always adhere to the obligation regarding dividend, bonusses and acquiring of shares. For more information on the latter, please see our blog from May 12, 2020. These operating entities are required to have a statement from both the head of the group (as meant in article 2:406 paragraph 1 of the Dutch Civil Code) and the parent company (as meant in article 2:24a of the Dutch Civil Code) prior to the application, stating that these obligations will be met; and
- the supplement on wage costs to cover employer costs will be increased from 30% to 40%.
Application and determination of the subsidy
The Dutch government is aiming to open the second application period as of July 6, 2020, whereby an subsidy for the wage bill for the period June, July, August and September can be requested. The application period will be open until August 31, 2020.
After the subsidy period, the company will have to request for the final subsidy amount to be determined. Previously, the Dutch government announced that companies who apply for both NOW and NOW 2.0, will have to request the determination of final subsidy amounts simultaneously. This is no longer the case. The company has the option to either request for two separate final determinations, or to request for one final determination for the NOW and NOW 2.0 simultaneously at the end of the NOW 2.0 subsidy period.
We will inform you of any changes or updates regarding the NOW 2.0. If you require any assistance or have any questions, please do not hesitate to contact us.